Vero sends letter to FPL about selling electric utility

VERO BEACH — In an action directed by the Vero Beach City Council, City Manager Jim Gabbard Friday sent a letter to Florida Power and Light offering the utility an opportunity to consider buying the city’s electric utility.

“The purpose of this letter is to explore whether, under the proper terms and conditions, your utility would be interested in purchasing all or part of the electric system,” is the first sentence of the correspondence addressed to Armando Oliver at FPL’s Miami office.

However, the letter has already come under criticism by former Councilman Charlie Wilson, who says the City Manager did not fulfill the Council’s directive in reaching out to FPL.

  The letter states that on Jan. 1, the city’s customers will switch over from the Florida Municipal Power Agency (FMPA) All Requirements Project to being a contract customer with the Orlando Utilities Commission (OUC).

“The term of the new power arrangement is twenty years, with a possible reopener at the ten-year mark,” it states. “The City is pleased with its contract and with OUC. However, as part of the public input involved in the decision to change over power partners, some discussion occurred about the possibility or desirability of selling part of all of the electric utility system to another utility operation, such as yours.

“As a result of that public interest the City Council passed a motion to direct that the City investigate such a sale.”

The invitation to FPL was the result of a discussion at a Nov. 16 meeting of the City Council attended by representatives from FPL and OUC. An FPL representative was asked if his company would be interested in purchasing the utility to which he said his company would consider pursuing that option, and barring any legal or financial roadblocks, they would embark upon a full-blown study and valuation of the utility at their own expense.

The letter from the city goes on to address the rights and obligations of the City and OUC under the contract and states that the City has “every intention of honoring its contract commitments and believes that the contract is in the public interest of our citizens and rate payers.”

After the city council directed staff to draft the letter, there had been much hand-wringing about doing it. On Thursday, Councilman Brian Heady demanded that the vote of the council be carried out and the letter was drafted.

In response to the letter Wilson commented that he was “speechless” and stated that the letter did not carry out the direction of the council on Dec. 1.

“This is clearly the perspective of the city staff, all those things he (Gabbard) put in there about being happy are his personal opinion,” Wilson said. “This letter is not an offer, it’s designed to once again dissuade anyone who might be interested in selling the electric utility.

“What the letter did not say was that the public has cried out and demanded a change in the electric utility,” Wilson said.

Wilson remembers the vote of the council as a directive to simply state the intention of the city reach out to FPL and other power providers about the possibility of a selling the power plant.

“The vote that we took was very clear, that under the right circumstances and if it was best for the residents and met the legal obligations, that the City of Vero Beach would consider the sale of the electric utility. It was very simple,” Wilson said.

Heady on the other hand, though disappointed that the letter did not go out under Mayor Kevin Sawnick’s signature, said it fulfilled the council’s directive.

“I think it does what we wanted to do, we wanted to put out there to FPL or whoever, it’s going to go out to the major players that might be interested in buying part or all of our electric system,” Heady said. “This is what the public wanted us to do and some can say that it should have been done a long time ago.”

Heady says he’s satisfied with the letter, but that the letter is not the end of the process and that the clarity about honoring the contract were needed. Heady said similar letters will go out to other power providers who might be interested in purchasing the utility.

“The happy language is to prevent OUC from saying that we’re trying to get out of a contract that hasn’t even started yet, but it clearly alerts OUC that we’re going to look at other options,” Heady said.

Details will be released as they become available.

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